Some businesses see slow payments from Alabama

The state government’s move to a new payment system left some contractors waiting longer than usual for their checks to arrive.

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The Alabama State Capitol.(Photo: Advertiser/File)

Contractors and a group representing them said this week that the state has been slower than usual in paying them over the past several months, because of problems implementing the new system.

“We had to borrow money to pay the bills because our vendors and suppliers still expect to be paid,” said Cody Corley, secretary-treasurer of the Pelham-based Bridge Builders of Alabama, which has worked on about 37 projects for the state since the start of 2014.

State officials said they were working through the problems with the State of Alabama Accounting and Resource System (STAARS), put in place in early October. The system, according to the state vendors' website, aims to improve the state’s performance on “all financial and accounting processes, including budgeting, procurement, personnel and payroll.”

The issues, said officials, stemmed from adaptation of the new technology and the fact many departments had their own accounting systems.

“It was a new system, and it’s taken additional time for the staff in the departments and in the Finance Department to get accustomed to working with the system,” said Bill Newton, Acting Director of Finance for the state. “And that’s working out better now.”

The problems grew to the point that in early November, the Comptroller’s office sent an email telling state agencies they could use state law to declare an emergency to ease the processing of purchase orders.

Some vendors said issues have improved. Newell Roadbuilders, based in Hope Hull, had at one point out about $1 million in unpaid invoices from the state according to Chris Newell, the vice president of the company. But Newell said they were “caught up with everything.”

“It lasted two or three weeks, where they were late-paying,” he said.

Nonprofit agencies contacted said they had not seen any difference in their payments. Tonie Ann Torrans, executive director of Penelope House, a domestic violence shelter based in Mobile, said their organization receives reimbursements from the state. Delays in those payments, she said, weren't unusual.

“They’re always slow with us,” she said. “When you send reports in, if they don’t like the way something’s documented . . . it’s not uncommon for us to wait for two or three months.”

Larry Childers, a spokesman for the Alabama Department of Economic and Community Affairs (ADECA), said they were working through issues with the system. Some vendors, he said, received payments at a slower rate than usual.

“One of the problems is every state agency had its own accounting system,” he said. “Getting ours to mesh properly with the new one is a challenge. I suspect every agency has different issues based on their own prior system.”

Tony Harris, a spokesman for the Alabama Department of Transportation, said “there’s been a significant reduction in how long it takes to get through the system” in the past few weeks. The department lent the comptroller’s office three employees to help get through the backlog, he said. Tom Layfield, director of the Alabama Road Builders Association, said DOT had done its best to help contractors sort out its invoices. But, he added, it was a serious issue for many companies.

“One of my members said, ‘I’ve begged, borrowed and stolen everything I can. I really have to get paid now,’” Layfield said Monday.

Newton said Monday the backlog now stands at about a week, though he added there would be exceptions and noted the state always has outstanding or pending bills.

“We’re receiving thousands a day,” he said. “We’re making thousands a day.”

Corley said Monday his payments were “slowly picking back up,” but added that “they haven’t totally caught back up yet.”